A very helpful book

STOCK PROFITS: GETTING TO THE CORE
Author: Michael C. Thomsett
Publisher: Financial Times / Prentice Hall
$24.95
hardcover, 258 pages



From the cover:

The author has taken fundamental investing further to determine the true earnings of a company. This takes time and thorough analysis, but it's worth every second of time spent digging further into the financials.
--- Kenneth S. Janke, Chairman, NAIC (National association of Investors Corporation)


The author says:

Are financial statements accurate? Can you rely on the information provided in the audited statement?

No.

The accepted rules of reporting are called GAAP (Generally Accepted Accounting Principles). These rules are so vague and generalized that companies and their auditors can take a lot of leeway in how they manipulate and report profits. For example, most companies exclude millions of dollars in employee stock options, but include estimated future earnings on profit sharing programs; income from capital gains, the sale of divisions, and many other big-ticket items. The result: The earnings per share are distorted, often by a lot.

To make a valid and accurate comparison between companies, you need to make certain "core earnings adjustments," which alter reported results so that only the core earnings -- earnings from the primary business operation -- remain. This book shows anyone, even those without an accounting background, how to read footnotes and other sections of the annual report, and how to make the needed adjustments.

Contents:

Preface
Part I -- The Techniques
Chapter 1 - Core Earnings calculations: A Revised Approach
Chapter 2 - Trend Discovery: Finding the Elements of Emerging Change
Chapter 3 - Trend Interpretation: Deciding What It Means
Chapter 4 - Confirmation: A Powerful Analytical Tool
Chapter 5 - Fundamental Volatility
Part II -- The Tools
Chapter 6 - Investigation: Verifying the Financials
Chapter 7 - The Core Earnings Workbook: Finding the Numbers
Chapter 8 - The Trend Workbook: Breaking the Code
Chapter 9 - Looking Ahead: The Core Roadmap
Index

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